INDIVIDUAL INCOME TAX

• With reference to income tax provisions of republic act no. 10963 otherwise
known as the “tax reform for acceleration and inclusion (train)”
TAXPAYER CLASSIFICATIONS
❑ By Residency Status

CLASSIFICATION DEFINITION

Resident Citizen A citizen of the Philippines residing therein

Non-resident Citizen A citizen of the Philippines who establishes to the

satisfaction of the Commissioner the fact of his physical
presence abroad with a definite intention to reside therein

Resident Alien An individual whose residence is within the Philippines and

who is not a citizen thereof
Non-resident Alien Refers to non-resident alien who shall come to the
Engaged in Trade or Philippines and stay for an aggregate period of more than
Business one hundred eighty (180) days during any calendar year.

Non-resident Alien Not Refers to a non-resident alien who shall come to the
Engaged in Trade or Philippines and stay for an aggregate period of one hundred
Business eighty (180) days or less during any calendar year.
TAXPAYER CLASSIFICATIONS
❑ By Sources of Income

CLASSIFICATION DEFINITION
Compensation Income Individuals whose source of income is purely derived from
Earners an employer-employee relationship
Self-employed A sole proprietor or an independent contractor who reports
income earned from self-employment. It includes
professionals whose income is derived purely from the
practice of profession and not under an employer-employee
relationship.

Professional – Person formally certified by a professional

body belonging to a specific profession by virtue of having
completed a required course of studies and/or practice,
whose competence can usually be measured against an
Mixed Income Earners established set of standard.
Individuals earning income both from compensation and
from self-employment (business or practice of profession)
INDIVIDUAL INCOME TAX RATES -
NEW

NEW INDIVIDUAL TAX RATES

Effective January 1, 2018 – Effective January 1, 2023 onwards
December 31, 2022
Tax Rates If taxable income is: Tax Rates If taxable income is:
0% PHP0 to PHP250,000 0% PHP0 to PHP250,000
20% PHP250,001 to PHP400,000 15% PHP250,001 to PHP400,000

25% PHP400,001 to PHP800,000 20% PHP400,001 to PHP800,000

30% PHP800,001 to 25% PHP800,001 to PHP2,000,000

PHP2,000,000
32% PHP2,000,001 to 30% PHP2,000,001 to
PHP8,000,000 PHP8,000,000
35% PHP8,000,001 or more 35% PHP8,000,001 or more
 INDIVIDUAL INCOME TAX RATES – OLD VS
NEW

NEW INDIVIDUAL TAX RATES

OLD INDIVIDUAL TAX RATES Effective January 1, 2018 – Effective January 1, 2023
December 31, 2022 onwards
Tax Tax Tax
If taxable income is: If taxable income is: If taxable income is:
Rate Rate Rate
5% PHP0 to PHP10,000 0% PHP0 to PHP250,000 0% PHP0 to PHP250,000
PHP10,001 to PHP250,001 to PHP250,001 to
10% 20% 15%
PHP30,000 PHP400,000 PHP400,000
PHP30,001 to PHP400,001 to PHP400,001 to
15% 25% 20%
PHP70,000 PHP800,000 PHP800,000
PHP70,001 to PHP800,001 to PHP800,001 to
20% 30% 25%
PHP140,000 PHP2,000,000 PHP2,000,000
PHP140,001 to PHP2,000,001 to PHP2,000,001 to
25% 32% 30%
PHP250,000 PHP8,000,000 PHP8,000,000
TAXPAYERS CLASSIFICATIONS – APPLICABLE TAX
RATE

CLASSIFICATION BY RESIDENCY TAX RATE

Resident Citizen
Non-resident Citizen 0% to 35% based on
Resident Alien taxable income

Non-resident Alien Engaged in Trade or Business

Non-resident Alien Not Engaged in Trade or Business 25% based on gross
income
CLASSIFICATION BY SOURCES OF INCOME TAX RATE
0% to 35% based on
Compensation Income Earners
taxable income
Self-employed and Professional 0% to 35% based on
taxable income
OR
Mixed Income Earners 8% based on gross
sales or gross
 TAXABLE AND
NON-TAXABLE INCOME
TAXABLE INCOME

• Refers to the pertinent items of gross income

specified in the NIRC, less deductions, if any,
authorized for such types of income by the NIRC or
other special laws.
 DELETED provisions under the TRAIN

SECTION 35, 79 (D) &

SECTION 34 (M)
(F)

Premium payments on
health and/or hospitalization
Allowance of personal
insurance of an individual
exemption for individuals
taxpayer as allowable
deduction from gross income

Personal Exemption: PHP50,000

PHP2,400 per family or
Additional Exemption: PHP25,000 per
PHP200 per month
qualified dependent
COMPENSATION INCOME
EARNERS
DEFINITION OF TERMS

• Compensation Income Earners

– Individuals whose source of income is purely derived from an
employer-employee relationship

• Compensation Income
– In general, the term “compensation” means all
remuneration for services performed by an employee for his
employer under an employer-employee relationship
 COMPENSATION INCOME EARNERS
EMPLOYEE
An individual performing
services under an employer-
employee relationship. It
covers all employees,
whether elected or
appointed, of the
Government of the
Philippines, or any political
subdivision thereof or any
agency to instrumentality.
EMPLOYER EMPLOYER & EMPLOYEE
RELATIONSHIP
Any person for whom an
It exists when the person for
individual performs or
whom services were
performed any service, of
performed (employer) has
whatever nature, under an
the right to control and
employer-employee
direct the individual who
relationship. For purposes of
performs the services
withholding, a person for
(employee), not only as to
whom an individual has
the result to be
performed past services and
accomplished by the work
from whom he is still
but also as to the details and
receiving compensation is an
means by which the results
“employer”
is accomplished.
 TAX ON ALIEN INDIVIDUALS & QUALIFIED FILIPINOS EMPLOYED BY
SPECIFIC EMPLOYERS

SECTON 25 (C), (D) & (E) 1997 TAX CODE REPUBLIC ACT NO. 10963

Fifteen percent (15%) final withholding tax is imposed on

the gross income of alien individuals and qualified
Filipino employees of regional or area headquarters
(RHQs) and original operating headquarters (ROHQs) of
multinational companies; offshore banking units (OBUs);
and petroleum contractors and subcontractors
Preferential tax treatment shall not be applicable
to RHQs, ROHQs, OBUs or petroleum service
contractors registering with SEC after January 1,
2018.

ITEM VETOED DRAFT REVENUE REGULATIONS

Existing RHQs, ROHQs, OBUs or petroleum service
The preferential income tax rate of qualified
contractors and subcontractors presently availing
employees of aforementioned entities shall no
preferential tax rates for qualified employees
longer be applicable without prejudice to the
shall continue to be entitled to avail of the
application of preferential tax rates under existing
preferential tax rate for present and future
international tax treaties.
qualified employees.
Compensation Income Earners
WHAT TO
FILE?
BIR FORM NO. 1700 –
Annual Income Tax Return
for Individuals Earning Purely
Compensation Income
(Including Non-
Business/Non-Profession
Income)
WHEN TO
FILE?
This return is filled on or
before April 15 of each year
covering income for the
preceding taxable year.
➢ When the tax due is in
excess of PHP2,000,
instalment payment of
income tax may be opted:
❑ First instalment –
paid at the time of filing
of the return;
❑ Second instalment –
paid on or before
October 15 following
the close of the calendar
year.
 Compensation Income Earners
WHO ARE REQUIRED TO 1.
FILE?
➢ Every resident citizen
deriving compensation
income from all sources, 2.
or resident alien and non-
resident citizen with
respect to compensation
income from within the
Philippines, EXCEPT the
following:
An individual earning purely
compensation income whose
taxable income does not
exceed two hundred fifty
thousand pesos
(PHP250,000)
An individual whose income
tax has been correctly
3. An individual whose sole
income has been
withheld by his employer,
subjected to final
provided, that such
individual has only one withholding tax;
employer for the taxable 4. A minimum wage earner
year – the Certificate of
Withholding filed by the
respective employers, duly
stamped “Received” by the
Bureau shall be tantamount
to the substituted filing of
income tax returns by said
employees.
 Compensation Income Earners
WHAT TO
FILE?
BIR FORM NO. 2316 –
Certificate of Compensation
Payment/ Tax Withheld for
Compensation Payment With
or Without Tax Withheld.
WHEN TO WHO NEEDS TO
FILE? FILE?
➢ To be issued to payee or
➢ To be accomplished by
on before January 31 of
the employer and issued
the succeeding year in
to each employee
which the compensation
receiving salaries, wages
was paid, or in cases
and other forms of
where there is
remuneration indicating
termination of
therein the total amount
employment, it is issued
paid and the taxes
on the same day the last
withheld therefrom during
payment of wages is
the calendar year.
made.
SELF-EMPLOYMENT & PRACTICE
PROFESSION
DEFINITION OF TERMS

• Self-employed
– A sole proprietor or an independent contractor who reports income earned from self-
employment. He/she controls who he/she works for, how the work is done and when it is
done. It includes professionals whose income is derived purely from the practice of
profession and not under an employer-employee relationship.
• Professional
–Person formally certified by a professional body belonging to a specific profession by
virtue of having completed a required course of studies and/or practice, whose competence
can usually be measured against an established set of standards. It also refers to a person
who engages in some art or sport for money, as a means of livelihood, rather than as a
hobby. It includes but is not limited to professional entertainers, professional athletes,
directors, producers, insurance agents, insurance adjusters, management and technical
consultants, bookkeeping agents, and other recipients of professional, promotional and
talent fees.
DEFINITION OF TERMS

• Gross Receipts
– This refers to the total amount of money or its equivalent representing the contract
price, compensation, service fee, rental or royalty, including the amount charged for
materials supplied with the services, and deposits and advance payments actually or
constructively received during the taxable period for the services performed or to be
performed for another person. In the case of VAT taxpayer, this shall exclude the VAT
component.

• Gross Sales
– This refers to the total of all sale transactions reported in a period, without any
deduction. However for purposes of these regulations, the following shall be allowed as
deductions:
o Sales returns and allowances for which a proper credit or refund was made
o Discounts determined and granted at the time of sale
TAX RATE

Purely self-employed individuals and/or professionals whose gross sales/receipts and

other non-operating income does not exceed the value-added tax (VAT) threshold as
provided in Section 109 (BB) of the Tax Code, as amended, shall have the option to
avail of:

• An eight percent (8%) tax on gross sales or receipts other non-operating

income in excess of two hundred fifty thousand pesos (PHP250,000) in
lieu of the graduated income tax rates under Section 24(A) and the
percentage tax under Section 116 all under the Tax Code, as amended;
OR
• The graduated rates under Section 24(A)(2)(a) of the Tax Code, as
amended
IMPORTANT POINTS TO CONSIDER FOR THE ELECTION
OF 8%

Election to be taxed at 8% income tax shall be made in the 1st quarter return of the
taxable year; otherwise graduated rates under Section 24(A) of the Tax Code shall
apply.

Once elected, shall be irrevocable for the taxable year for which return is made.

At any time during a given taxable year, if the gross sales or receipts exceeded the
VAT threshold (PHP3,000,000.00), graduated rates shall automatically be applied.
SELF-EMPLOYMENT AND PRACTICE OF
PROFESSION

WHAT TO WHEN TO
FILE? FILE?
This return is filled on or
before April 15 of each year
covering income for the
preceding taxable year.
➢ When the tax due is in
BIR FORM NO. 1701 –
excess of PHP2,000,
Annual Income tax Return
instalment payment of
for Self-Employed
income tax may be opted:
Individuals, Estates and ❑ First instalment –
Trusts. paid at the time of filing
of the return;
❑ Second instalment –
paid on or before
October 15 following
the close of the calendar
year.
SELF-EMPLOYMENT AND PRACTICE OF
PROFESSION

WHO ARE REQUIRED TO

FILE? 1. A resident citizen engaged in
trade, business, or practice of
profession within and without
the Philippines
2. A resident alien, non-resident
➢ This return shall be filed citizen or non-resident alien
in triplicate by the individual engaged in trade,
business or practice of
following individuals
profession within the
regardless of amount of Philippines.
gross income: 3. A trustee of a trust, guardian
of a minor,
executor/administrator of an
estate, or any person acting
in any fiduciary capacity for
any person, where such trust,
estate, minor or person
engaged in trade or business.
SELF-EMPLOYMENT AND PRACTICE OF
PROFESSION
WHAT TO
FILE?
BIR FORM NO. 1701Q –
Quarterly Income Tax Return
for Self-employed
Individuals, Estates, and
Trusts
WHEN TO
FILE?
➢ 1st Quarter – on or before
May 15 of the current
taxable year
➢ 2nd Quarter – on or before
August 15 of the current
taxable year
➢ 3rd Quarter – on or before
November 15 of the
current taxable year
SELF-EMPLOYMENT AND PRACTICE OF
PROFESSION

WHO ARE REQUIRED TO

FILE? 1. A resident citizen engaged in
trade, business, or practice of
profession within and without
the Philippines
2. A resident alien, non-resident
➢ This return shall be filed citizen or non-resident alien
in triplicate by the individual engaged in trade,
business or practice of
following individuals
profession within the
regardless of amount of Philippines.
gross income: 3. A trustee of a trust, guardian
of a minor,
executor/administrator of an
estate, or any person acting
in any fiduciary capacity for
any person, where such trust,
estate, minor or person
engaged in trade or business.
MIXED INCOME EARNERS
 DEFINITION OF TERMS

• Mixed Income Earners

– Individuals earning income both from compensation and from self-employment (business or practice
of profession)
• Gross Receipts
– This refers to the total amount of money or its equivalent representing the contract price,
compensation, service fee, rental or royalty, including the amount charged for materials supplied with
the services, and deposits and advance payments actually or constructively received during the
taxable period for the services performed or to be performed for another person. In the case of VAT
taxpayer, this shall exclude the VAT component.
• Gross Sales
– This refers to the total of all sale transactions reported in a period, without any deduction. However
for purposes of these regulations, the following shall be allowed as deductions:
o Sales returns and allowances for which a proper credit or refund was made
o Discounts determined and granted at the time of sale
TAX RATE

1. The compensation income shall be subject to the tax rates prescribed under
Section 24(A)(2)(a) of the Tax Code, as amended;

2. The income from business or practice of profession shall be subject to the

following:
➢ If the gross sales/receipts and other non-operating income do not exceed the VAT
threshold, the individual has the option to be taxed at:
1. Eight percent (8%) income tax based on the gross sales/receipts and other
non-operating income in lieu of the graduated income tax rates and
percentage tax under Section 116 of the Tax Code, as amended; OR
2. Graduated Income tax rates prescribed under Section 24(A)(2)(a) of the Tax
Code, as amended.
➢ If the gross sales/ receipts and other non-operating income exceeds the VAT
threshold, the individual shall be subject to the graduated income tax rates
prescribed under Section 24(A)(2)(a) of the Tax Code, as amended
MIXED INCOME EARNERS

WHAT TO WHEN TO
FILE? FILE?
This return is filled on or
before April 15 of each year
covering income for the
preceding taxable year.
➢ When the tax due is in
BIR FORM NO. 1701 –
excess of PHP2,000,
Annual Income tax Return
instalment payment of
for Self-Employed
income tax may be opted:
Individuals, Estates and ❑ First instalment –
Trusts. paid at the time of filing
of the return;
❑ Second instalment –
paid on or before
October 15 following
the close of the calendar
year.
MIXED INCOME EARNERS

WHO ARE REQUIRED TO

FILE? 1. A resident citizen engaged in
trade, business, or practice of
profession within and without
the Philippines
2. A resident alien, non-resident
➢ This return shall be filed citizen or non-resident alien
in triplicate by the individual engaged in trade,
business or practice of
following individuals
profession within the
regardless of amount of Philippines.
gross income: 3. A trustee of a trust, guardian
of a minor,
executor/administrator of an
estate, or any person acting
in any fiduciary capacity for
any person, where such trust,
estate, minor or person
engaged in trade or business.
MIXED INCOME EARNERS
WHAT TO
FILE?
BIR FORM NO. 1701Q –
Quarterly Income Tax Return
for Self-employed
Individuals, Estates, and
Trusts
WHEN TO
FILE?
➢ 1st Quarter – on or before
May 15 of the current
taxable year
➢ 2nd Quarter – on or before
August 15 of the current
taxable year
➢ 3rd Quarter – on or before
November 15 of the
current taxable year
MIXED INCOME EARNERS

WHO ARE REQUIRED TO

FILE? 1. A resident citizen engaged in
trade, business, or practice of
profession within and without
the Philippines
2. A resident alien, non-resident
➢ This return shall be filed citizen or non-resident alien
in triplicate by the individual engaged in trade,
business or practice of
following individuals
profession within the
regardless of amount of Philippines.
gross income: 3. A trustee of a trust, guardian
of a minor,
executor/administrator of an
estate, or any person acting
in any fiduciary capacity for
any person, where such trust,
estate, minor or person
engaged in trade or business.
HOW TO COMPUTE INCOME TAX

• Compute Taxable Compensation Income

• This reflected in the BIR Form No. 2316, which will be issued by your employer
STEP 1

• Compute Taxable Business/Professional Income

• Gross Sales/Receipts or Revenues for the Year
XXX
• Less: Cost of Sales/Cost of Services (XXX)
STEP 2 • Gross Taxable Business/ Professional Income XXX

• Compute Net Taxable Income by adding step 1 and 2 above less

the allowable deductions
STEP 3
ALLOWABLE DEDUCTIONS FROM GROSS
INCOME

OPTIONAL STANDARD DEDUCTION

ITEMIZED DEDUCTIONS
(OSD)

• Expenses Forty percent (40%) of gross

sales/receipts, as the case
• Interest
may be. However, no
• Taxes deductions shall be allowed to
• Losses the following individual
• Bad Debts OR taxpayers:
• Depreciation 1. Earning compensation
• Depletion of Oil and Gas income arising from
Wells and Mines personal services rendered
under an employer-
• Charitable and Other
employee relationship
Contributions 2. Those who opted to be
• Research and taxed at 8% on their
Development income from
• Pension Trusts business/practice of
profession
IMPORTANT POINTS TO CONSIDER FOR ALLOWABLE
DEDUCTIONS

• Intention to elect the OSD should be made, otherwise, itemized deduction is

considered to be availed.
• When elected, shall be irrevocable for the taxable year for which return is
made.
• The election to claim either the OSD or the itemized deduction for the taxable
year must be signified by checking the appropriate box in the income tax return
filed for the first quarter of the taxable year adopted by the taxpayer.
• Once the election is made, the same type of deduction must be consistently
applied for all the succeeding quarterly returns and in the final income tax
return for the taxable year.
 • Compute the Income Tax Due
STEP 4

On their
compensation • At graduated income tax rates
income

•If exceeding the VAT threshold – at graduated income tax rates

On their income •If below the VAT threshold, at the option of the taxpayer, -
from the •Either eight percent (8%) income tax based on the gross
conduct of trade sales/receipts and other non-operating income in lieu of the
or business or graduated income tax rates and percentage tax under Section
the practice of 116 of the Tax Code, as amended OR
•Graduated income tax rates prescribed under Section 24(A)
profession (2)(a) of the Tax Code, as amended.
OSD FOR GENERAL PROFESSIONAL PARTNERSHIPS (GPPs) &
PARTNERS OF GPPs

SECTION 34 (L) 1997 TAX CODE

In lieu of the itemized allowable deductions, an individual subject to tax,

other than a non-resident alien, may elect the standard deduction of forty
percent (40%)of gross sales/receipts, as the case maybe.

SECTON 25 (C), (D) & (E) 1997 TAX CODE

That a general professional partnership and the partners comprising such

partnership may avail of the optional standard deduction only once, either
by the general professional partnership or the partners comprising the
partnership
ADDITIONAL PROVISION UNDER THE
TRAIN

Section 51(A)(5): The Income Tax Return (ITR) shall consists of a maximum of four (4)
pages in paper form or electronic form, and shall only contain the following
information:

A. Personal profile and information;

B. Total gross sales, receipts or income from compensation for services
rendered, conduct of trade or business or the exercise of a
profession, except income subject to final tax as provided under this
Code;
C. Allowable deductions under this Code;
D. Taxable income as defined in Section 31 of this Code; and
E. Income tax due and payable
FRINGE BENEFIT
FRINGE BENEFIT

• It means any good, service, or other benefit furnished or granted

by an employer in cash or in kind, in addition to basic salaries, to
an individual employee (except rank and file employee as
defined in these regulations).
TAX ON FRINGE BENEFIT GIVEN TO NON-RANK & FILE
EMPLOYEES

SECTION 33 (A) 1997 TAX CODE

Fringe benefits given to non-rank and file employees are subject to thirty-
two percent (32%) final tax on the grossed-up monetary value of fringe
benefit. The grossed-up monetary value is determined by dividing the
actual monetary value by sixty-eight percent (68%).

REPUBLIC ACT NO. 10963

Fringe benefit tax rate is increased to 35% and grossing-up of monetary

value of fringe benefit will be fixed at 65% effective January 1, 2018.
 SAMPLE ILLUSTRATION

MRU Company (a domestic employer/company) granted Ms. Mel (a Filipino branch manager employee),
in addition to her basic salaries, PHP5,000 cash per quarter for her personal membership fees at
Country Gold Club. The Fringe Benefits Tax (FBT) shall be computed as follows:
Monetary value of fringe benefit: PHP 5,000.00

1997 TAX CODE RA NO. 10963

Percentage divisor applicable 68% Percentage divisor applicable 65%
FBT Rate 32% FBT Rate 35%

Monetary Value PHP 5,000.00 Monetary Value PHP 5,000.00

Divided by: Grossing-up factor 68% Divided by: Grossing-up factor 65%
Grossed-up monetary value PHP 7,352.94 Grossed-up monetary value PHP 7,692.31
Multiply by: FBT rate 32% Multiply by: FBT rate 35%
FBT PHP 2,352.94 FBT PHP 2,692.31
PROVISIONS AFFECTING
PASSIVE INCOME OF
INDIVIDUAL TAXPAYERS
UNDER THE TRAIN
 SECTION
Section 24 (B)(1) Income Tax
rates on interests and other
winnings
Section 24 (B)(2) Income tax
rates on cash and/or property
dividends
Section 24 (C) Income tax
rates on capital gains from
sale of shares of stock not
1997 TAX CODE
Interest income from a
depository bank under the
expanded foreign currency
deposit system shall be
subject to 7.5% final income
tax
Philippine Charity
Sweepstakes Office (PCSO)
and lotto winnings are exempt
from twenty percent (20%)
final withholding tax.
Dividend income is taxed at
graduated rates of 6%, 8% and fixed at 10%
10% beginning January 1 of
1998, 1999 and 2000
respectively
Capital gains from sale of
shares not traded in the Stock
Exchange are taxed at 5% (for
REPUBLIC ACT NO. 10963
Tax on interest income from
expanded foreign currency
deposit system shall be
increased to 15%
Retained tax exemption on
winnings from PCSO and Lotto
winnings amounting to
PHP10,000 or less
Tax on dividend income will be
Tax on capital gains from sale
of shares not traded in the
Stock Exchange shall be
 Section 110. (A)(2) Creditable Input Tax
RA NO. 8424 - NIRC
Section 110. Tax Credits

(A)(2). Creditable Input Tax –

The input tax on domestic purchase or importation of goods or properties by a VAT registered person shall
be creditable:

(a) To the purchaser upon consummation of sale and on importation of goods or properties; and
(b) To the importer upon payment of the value-added tax prior to the release of the goods from the custody
of the Bureau of Customs.

Provided, that the input tax on goods purchased or imported in a calendar month for use in trade or
business for which deduction for depreciation is allowed under this Code shall be spread evenly over the
month of acquisition and the fifty-nine (59) succeeding months if the aggregate acquisition cost for such
goods, excluding the VAT component thereof, exceeds one million pesos (PHP1,000,000); Provided,
however, that if the estimated useful life of the capital good is less than five (5) years, as used for
depreciation purposes, then the input VAT shall be spread over such a shorter period: Provided, finally,
that in the case of purchase of services, lease or use of properties, the input tax shall be creditable to the
purchaser, lessee or license upon payment of the compensation, rental, royalty or fee.
Section 110. (A)(2) Creditable Input Tax

RA NO. 10963 – TRAIN

Section 35. Amending SECTION 110 of the NIRC

(A)(2). Creditable Input Tax –

• Included a provision stating that amortization of input VAT shall only be allowed
until December 31, 2021.

• Thereafter taxpayers with unutilized input VAT on capital goods purchased or

imported shall be allowed to apply the same as scheduled until fully utilized.
Section 112. Period within which Refund of Input Taxes shall be
Made

RA NO. 8424 – NIRC

Section 112. Refunds or Tax Credits of Input Tax

(C) Period within which Refund of Input Taxes shall be Made -

In proper cases, the Commissioner shall grant a refund or issue the tax credit
certificate for creditable input taxes within one hundred twenty (120) days from the
date of submission of complete documents in support of the application filed in
accordance with Subsections (A) hereof.

In case of full or partial denial of the claim for tax refund or tax credit, or the failure
on the part of the Commissioner to act on the application within the period
prescribed above, the taxpayer affected may, within thirty (30) days from the
receipt of the decision denying the claim or after the expiration of the one hundred
twenty day-period, appeal the decision or the unacted claim with the Court of Tax
Appeals.
Section 112. Refunds or Tax Credits of Input Tax

RA NO. 10963 – TRAIN

Section 36. Amending Section 112 of the NIRC

xxx

(C) Period within which Refund of Input Taxes shall be Made –

I. The Commissioner shall grant a refund for creditable input taxes within ninety
(90) days from the date of submission of receipts or invoices and other
documents in support of the application filed.
II. The failure on the part of any official agent or employee of the BIR to act on an
application within ninety (90) days shall be punishable under Section 269 of this
Code.